Case Study: Global Tower Partners
Explore this investment
- Contrarian Investment
- Rapid Consolidating Acquisitions
- Debt Financing
As an experienced communications investor, we have studied the wireless tower business several times over the years. Initially, the market opportunity was too nascent; as the industry grew and investor exuberance took hold, Great Hill Partners had refrained from entering the sector due to high entry valuations driven by unrealistic growth expectations and the industry’s easy access to capital.
During the early 2000s, the downturn in the telecom market and the ensuing liquidity crunch left the public consolidators and private equity-backed players over-leveraged and struggling for solvency as multiples tumbled. Despite that backdrop, we took the position that industry fundamentals were still favorable and viewed this as an attractive window to consolidate tower assets.
We had cultivated a relationship with businessman Marc Ganzi, and in 2003, Marc and GHP created Global Tower Partners with the acquisition of a tower portfolio from the industry’s largest operator, American Tower. Over the next 18 months, we were able to use our knowledge of the sector to help source and execute 10 additional acquisitions. GHP also provided additional equity and helped arrange over $200 million in debt financing.
Our combination of market insight, an aggressive M&A strategy, and creative financing enabled us to partner with Marc to build Global Tower Partners into the largest privately held company in the wireless tower space. When prices rebounded in 2005, Global Tower needed access to cheaper capital. Marc Ganzi and GHP structured a sale of the business to The Blackstone Group that enabled the management team to remain at the helm and continue to build value.
Marc commented on our partnership, “Many investors piled in at high prices, but GHP had the discipline to wait, stay close to the sector and the conviction to sponsor me when others were nervous and unwilling to invest in the industry. When circumstances changed, they were incredibly supportive of the company’s need to access capital, grow the business and to compete effectively.”